Japan: Tokyo Steel’s scrap purchase price in Tahara climbs to over one-year high

Japan’s leading EAF mini mill- Tokyo Steel has raised its scrap purchase price by JPY 1,000 ($9) for Tahara plant and JPY 500 ($5) for Kyushu works. Notably, this is the company’s second hike made for Tahara works in the last four days. Revised offers have come into effect from today (i.e.15th Sep’20).

The company would pay JPY 27,000/t ($254) for H2 scrap delivered at its Tahara plant in Central Japan and Kyushu works. While bid price for the other three plants i.e. Utsunomiya, Okayama and Takamatsu steel centre as against the last set of prices. Prices at Tahara plant hit over fifteen-months high in Japan since the closing of Jun’19. Some of the major reasons enumerated as.

• Rise in export prices of Japanese scrap after monthly tender has prompted Tokyo Steel to hike its scrap purchasing prices.
• Decent demand from overseas buyers like Vietnam, has kept Japanese scrap export offers on the higher side
• Japan’s electric-arc-furnace (EAF) steel producers are considering higher scrap costs in their billet prices to run at a stable rate, even though the domestic demand has been weak for construction steel.
• Few construction-related demands have begun to delay due to the corona inactivity while the amount of scrap used in domestic electric furnaces is declining, strong overseas demand is pushing up domestic prices.

Tokyo Steel‘s bids for scrap purchase from 15th Sep’20Price in JPY
Source: Tokyo Steel report

Japanese Kansai scrap export prices climb m-o-m
Japan’s Kansai tender – scrap export prices concluded today. The winning bid was awarded a total of 5,000 t of Japanese H2 at an average price of JPY 29,310/t ($276), FAS, in comparison with JPY 27,000/t in the previous tender of 28th Aug’20. It was JPY 2,310/t ($21) higher than previous bid price and JPY 60 lower than Kanto, putting Japanese H2 scrap export offers at JPY 29,000/t FoB Japan basis.

The winning bid this time is not much different from the latest Kanto Tender as it was last time, but it is significantly higher than the local electric furnace purchase price. Overseas market prices are still strong and this is the result of the bidding according to market sources.